This paper considers the intersection of income tax and WTO rules. It defends an interpretation of the non-discrimination obligations in line with customary rules of interpretation as stipulated by the Vienna Convention on the Law of Treaties. It, thus, departs from the historic assumption that income taxes are not or only to a very limited extent covered by the GATT. Subsequently, the reach of the GATS in terms of its non-discrimination obligations and the substantive defenses thereto is assessed. It is analyzed how states may justify their discriminatory income tax measures under the subparagraphs of Article XIV of the GATS. Additionally, the stringency with which measures are assessed under the chapeau of Article XIV is illustrated. The last section of the first part reviews the applicability of the SCM Agreement with respect to income tax measures. It further analyses the scope of the SCM Agreement with respect to transfer price adjustments. Lastly, an interpretation of arm’s length in footnote 59 of the SCM Agreement in accordance with the OECD Transfer Pricing Guidelines is defended. Having established the far-reaching scope of the WTO covered Agreements with respect to income tax measures, the second part analyses the rivalry between the respective dispute settlement mechanisms of tax and trade. It dismisses a narrow understanding of jurisdictional overlap that appears to exclusively focus on conflicting judicial decisions and proposes and approach under which the judicial settlement of disputes may rival with the institutionalized diplomatic dispute resolution procedure under tax agreements. Provisions and legal principles that may allow Panels to find income tax disputes inadmissible under the GATT, GATS and SCM Agreement are assessed. The third part reviews, albeit briefly, the appropriateness of the WTO DSB venturing in the field of international income taxation. Considerations are introduced that go beyond the black letter of the law and may ultimately influence the decision to favor an inclusionary or exclusionary approach to income tax measures.
The U.S. tort system has experienced various reforms over the last three decades. While there is an extensive literature on the consequences of these reforms, very little is known about their determinants. In this study, we investigate the role of party politics in the reform process across U.S. states. In order to test whether any party effect goes beyond voter preferences, we apply the idea behind regression discontinuity studies based on close electoral outcomes to semi-parametric proportional hazards models. We find that in states with close election outcomes, a narrow Republican majority in the lower house is associated with a 50 to 150% higher risk of tort reform enactment compared to a narrow Democratic majority. Our results indicate that party politics plays a role in tort reforms over and above potential underlying preferences in the constituency.
We propose a forensic approach to investigate the politico-economic forces that influence narrow vote outcomes in legislative assemblies. Applying nonparametric estimation techniques to a data set covering all roll call votes between 1990 and 2014, we can identify the existence of precise control over legislative vote outcomes in the U.S. House of Representatives. Several pieces of evidence indicate that this control seems to be, at least partly, driven by campaign finance donations. Moreover, control seems to be most prevalent in times of higher electoral competition, i.e. during election years. Our contribution sheds new light on the role of money in politics and, more generally, opens a novel perspective to empirical research on legislative voting.
